In a report published Monday, J.P. Morgan & Co. reiterated its Overweight rating on Ares Capital (NASDAQ: ARCC), and slightly raised its price target from $17.50 to $18.00.

J.P. Morgan noted, “ARCC remains one of our favorite picks within the BDC universe, due to a conservative strategy and broad access to capital vs. peers. In 3Q, the company raised equity (roughly $428M) and refinanced debt at more attractive rates, positioning it for future asset growth. Our correlation analysis forecasts roughly 3.6% of NAV accretion, to $16.07 from $15.51 in 2Q. We forecast NAV expansion to $16.22 by CYE 2013. Margin pressure dampened by cheaper debt. ARCC improved its cost of debt in the quarter, through the issuance of a $175M term loan at a 69bp reduction and the issuance of convertible notes at a 100bp reduction.”